Intensified electricity market

The Government bill for the new Electricity Market Act in Finland will bring changes to the electricity market, because Fingrid will assume responsibility for the development of information exchange for electricity trading and the balance settlement procedure. Measures to develop an inter-Nordic balance service have been launched. The geographical expansion of the market will also be enhanced in many ways.

Fingrid together with the Swedish transmission system operator (TSO) Svenska Kraftnät and the Norwegian TSO Statnett is establishing an inter-Nordic balance service company for the electricity market. Finland has been selected as the base of the new company. A similar balance service company between several countries has not been previously established in Europe.

In line with the new arrangement, the balance responsible parties operating in the electricity market no longer need to conclude separate balance settlement agreements with the TSOs of Finland, Sweden and Norway. In the future, an agreement with the joint company will suffice for the balancing of the electricity balance. This is also a key condition for the creation of the Nordic retail market of electricity.

In the context of the retail market, Fingrid is ready to launch a study concerning a data hub for the electricity market. The objective is to find out what benefits could be achieved by concentrating the data communications between the market parties and network companies to a single data hub. If the authorities and the companies engaged in the electricity industry support the concept, the study could commence at the end of this year and be completed during the second half of 2014. The issue was discussed today in Fingrid’s Electricity Market Day.

Neighbouring marketshave increasingly greater impact on Finland

The Electricity Market Day discussed extensively the functioning of the electricity market. The Finnish market is influenced more and more by events in the neighbouring countries, such as diminished imports of electricity from Russia, division of Sweden into bidding areas, and the Baltic countries joining the Nordic electricity market.

Last year was difficult in the electricity market, because electricity transmission congestions restricted the foreign trade of electricity. Abundant supply of hydropower in Norway and Sweden resulted in a high demand for electricity imports to Finland. More electricity than ever before was imported to Finland from the west in 2012. Even more electricity would have been imported to Finland from the west if failures on the cross-border transmission interconnectors had not restricted the import volumes.

The goal is to always secure the maximum possible transmission capacity between countries. Fingrid aims to schedule the transmission outages required by maintenance and construction work so that the disadvantages on the market are minimised.

Market integration is making headway in many different areas. The goal is to complete the market coupling in North-West Europe at the end of 2013. In the Baltic Sea region, the integration of the Baltic countries into the Nordic system has made good progress. Estonia and Lithuania have already joined Nord Pool Spot’s trading system, and Latvia will be integrated in the summer. Two-way electricity transmissions between Russia and Finland will be developed to enable electricity exports from Finland to Russia.